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IMPROVING CONTRACT MANAGEMENT BY END USERS
Recommendations Handbook for Professional Services Contracts
by
Dr. Claudia Mara Dias Wilson
Associate Professor
Civil and Environmental Engineering Department
New Mexico Institute of Mining and Technology
Socorro, NM 87801
Dr. Carlos Ulibarri
Assistant Professor
Management Department
New Mexico Institute of Mining and Technology
Socorro, NM 87801
Research Sponsored by
New Mexico Department of Transportation
Research Bureau
In Cooperation with
The U.S. Department of Transportation
Federal Highway Administration
June 2012
NMDOT Research Bureau
7500B Pan American Freeway NE
PO Box 94690
Albuquerque, NM 87199-4690
(505)-841-9145
http://NMDOTResearch.com
© New Mexico Department of Transportation
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PREFACE
This Recommendations Handbook supports the New Mexico Department of Transportation‟s
(NMDOT) personnel training program aimed at improving the development and administration
of non architectural and engineering (non-A&E) professional services contracts. This Handbook
follows the chronology for a project‟s life, from the point at which the initial solicitation is
developed through monitoring of the ongoing project, and ending with closure and final
evaluation of goals. It includes recommendations for contract management strategies, contract
development techniques, examples of the contract development process, and an analysis of the
prospective effectiveness of these recommendations. In addition, guidance is offered in the areas
of contract management, development of adequate scopes of work, and specifying deliverables,
budgets, and milestones. The Handbook uses flowcharts to describe regulatory procedures and
documentation requirements at the various stages of the contracting process for various contract
types: sole source, competitive proposal, emergency procurement, and small purchase (<
$50,000). Also considered are ethical issues that may arise in different stages of managing
contract performance.
NOTICE
DISCLAIMER
The United States Government and the State of
New Mexico do not endorse products or
manufacturers. Trade or manufactures‟ names
appear herein solely because they are considered
essential to the object of this report. This
information is available in alternative accessible
formats. To obtain an alternative format, contact
the NMDOT Research Bureau, 7500B Pan
American Freeway NE, PO Box 94690,
Albuquerque, NM 87199-4690 or by telephone
(505)-841-9145
This report presents the results of research
conducted by the authors and does not necessarily
reflect the views of the New Mexico Department
of Transportation. This report does not constitute
a standard or specification.
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ABSTRACT
The New Mexico Department of Transportation (NMDOT) identified the need for improvement
of both quality and consistency in developing and managing contracts. Therefore, this
Recommendations Handbook has been developed to support NMDOT‟s personnel training
program. It aims at improving the development and administration of non architectural and
engineering (non-A&E) professional services contracts. To this end, the Handbook takes a step-
by-step approach in guiding project managers and contract administrators in formulating,
awarding and monitoring contracts. At each step, guidelines are offered – do‟s and don‟ts in
specifying and monitoring contracts; such as the scope-of-work to be performed, time and budget
constraints, and the expected deliverables. References are made to state and federal procurement
statutes and regulations. Flowcharts detailing the procedures to be followed and the
documentation required are also provided. Ethical considerations in each stage of the contract
life are identified.
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ACKNOWLEDGEMENTS
The authors would first like to express their gratitude to the funding provided by the US
Department of Transportation Federal Highway Administration and the New Mexico Department
of Transportation (NMDOT) Research Bureau.
Special thanks to Keli Daniell, project manager for this contract and Deirdre Billingsley, contract
administrator. Their experience and assistance was essential to the completion of this project.
Thanks are also extended to Javier Lopez for indicating the need for this project, presenting the
idea to the NMDOT Research Bureau, and assisting the research team in the initial tasks.
This work was developed in close collaboration with members of the Technical Panel: Richard
Martinez, Marlene Sandoval, SandraLee Rosen, and Cynthia Christ, who carefully reviewed all
drafts, offered invaluable suggestions, and answered numerous questions. The authors are very
thankful for their patience and contribution to this project.
Finally, the authors would like to acknowledge the contribution made to the preliminary tasks of
this project by Dr. Andrew Budek-Schmeisser and Mrs. Barbara Budek-Schmeisser who were
very valuable members of the research team. Thanks also to Ms. Sehin Faris, a former Civil
Engineering student at New Mexico Tech who served as Research Assistant in the beginning of
this project. Finally, the authors are grateful to Ms. Jessica Meyer who kindly donated her time
and experience in the development of the surveys presented to NMDOT Personnel.
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TABLE OF CONTENTS
INTRODUCTION…………………………………………………………………...….…… 1
MOTIVATION FOR RECOMMENDATIONS HANDBOOK ………...………...……. 1
PROJECT MANAGEMENT AND CONTRACT ADMINISTRATION …………...…. 2
RULES AND ETHICAL CONCERNS …...…………………………………...……….. 2
CHRONOLOGICAL LIFE OF A PROJECT …………………………………………... 3
DEVELOPING THE SCOPE OF WORK AND THE RFP ……………………………….... 5
GUIDING PRINCIPLES AND RECOMMENDATIONS ……………………………... 5
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS …….. 8
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED …...... 9
RULES ………………………..………………………………………………………… 9
PROPOSAL EVALUATION AND SELECTION ……..………………………………...… 11
GUIDING PRINCIPLES AND RECOMMENDATIONS ……………………………... 11
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS …….. 12
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED …....... 13
RULES ………………………..………………………………………………………… 13
CONTRACT NEGOTIATION AND PROCESSING……………………………………..... 15
CONTRACT PROCESSING …………………………….……………………………... 15
GUIDING PRINCIPLES AND RECOMMENDATIONS ……………………………... 16
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS ……. 17
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED …....... 18
MONITORING THE CONTRACT ………………………………………………………… 19
GUIDING PRINCIPLES AND RECOMMENDATIONS ……………………………... 19
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS ……. 20
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED …....... 21
RULES ………………………..………………………………………………………… 23
CLOSURE OF CONTRACT AND FINAL DELIVERABLES ……...…………………….. 26
GUIDING PRINCIPLES AND RECOMMENDATIONS ……………………………... 26
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS ……. 27
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED …....... 28
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LIST OF FIGURES
FIGURE 1 Five Main Phases of a Project …..………………………………………………. 4
FIGURE 2 Administrative Procedures and Documentation Required in the Development of
the Scope-of-Work and the RFP……………………………………………………………...
10
FIGURE 3 Administrative Procedures and Documentation Required in the Evaluation and
Selection of Winning Proposal………. ………………………………………………………
14
FIGURE 4 Administrative Procedures and Documentation Required in the Negotiation
Phase of the Contracting Process...…………………………………………………………..
18
FIGURE 5 Administrative Procedures and Documentation Required in Monitoring
Contracts………………………………………………………………………………………
22
FIGURE 6 Administrative Procedures and Documentation Required in the Amendment
Process ………………………………………………………………………………………..
23
FIGURE 7 Administrative Procedures and Documentation Required in Closure of
Contracts ……………………………………………...………………………………………
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INTRODUCTION
The purpose of this Recommendations Handbook is to provide project managers and contract
administrators a practical guide of the NMDOT contracting process. The focus is on non
architectural and engineering (non-A&E) Professional Service Agreements (PSA), including
competitive proposals, emergency procurement, small purchases (not exceeding $50,000.00),
and sole source agreements. The Handbook follows the chronological life of a project, from
developing the scope of work and administering the request for proposal (RFP) to the closure
and evaluation phase. Guiding principles and recommendations are provided for each stage in
the contract management/administration process, along with descriptions of the responsibilities
of the project manager and the contract administrator. Flowcharts are used to outline
administrative procedures and procurement regulations to be followed, and documentation
requirements. Also included are ethical considerations to support a more effective project
management and contract administration process.
MOTIVATION FOR RECOMMENDATIONS HANDBOOK
As part of the project “Improving Contract Management by End Users”, the New Mexico Tech
research team interviewed New Mexico Department of Transportation (NMDOT) project
managers and contract administrators to gather information about their views regarding ongoing
contract management/administration practices at the agency. The survey questions considered
various steps in the contracting process: developing the scope of work and RFP, awarding the
contract, negotiating amendments to the original contract, and evaluating contract performance.
A summary of the main concerns and observations compiled after the interviews is presented
below.
Agency personnel experienced in the contracting process expressed frustration with having to
learn the process on their own, without formal training or orientation.
Agency personnel are confused about the contracting process; especially the forms and
documents required for the different types of contract.
Project management and contract administration duties are often conducted by the same
person; usually the person “who knows the most about this type of work”. Unfortunately, this
person does not always have experience or training in project management and/or contract
administration.
Responsibilities of persons holding the same job title in different Bureaus vary tremendously.
These responsibilities are often not clear to the individuals when they initially start working in
these positions.
Filing procedures for contract-related documents vary from Bureau to Bureau. In most
instances, documents related to each contract are kept by a single individual who is in charge
of managing the contract. No procedures are currently in place to ensure various managerial
practices: (1) filing and organization of all necessary documents; and (2) transfer of all
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documentation to the appropriate personnel should the individual in charge of the contract
leave the Bureau or the NMDOT.
Because the scope-of-work from the RFP is usually copied into the contract, it is imperative
that it properly reflects the needs of the Bureau and the NMDOT.
The amendment process is often considered lengthy, burdensome, and sometimes confusing.
Bureaus that delegate contract administration duties to a single individual tend to have a better
understanding and a more positive view of the contracting process.
The concerns and observations outlined above provide the motivation for a practical guide aimed
at improving project management and contract administration practices at the agency. To this
end, it is instructive to clarify the roles and responsibilities of project managers and contract
administrators.
PROJECT MANAGEMENT AND CONTRACT ADMINISTRATION
Effective project management and contract administration are essential to a project‟s success.
Although the same individual may be responsible for performing both duties, managing the
project and administering the contract, the underlying duties are distinct and encompass different
responsibilities. A general overview of the roles and responsibilities of project managers and
contract administrators is presented below, and more detailed descriptions are included in the
sections dedicated to each chronological phase of the project.
Though distinct, the roles and responsibilities of project managers and contract administrators
are complementary. The main responsibilities of the project manager are to serve as a liaison
between the contractor and the NMDOT and to monitor the project, assuring that milestones are
observed and deliverables are completed. Accordingly, project managers review progress
reports submitted by the contractor, verify that the work performed meets the project‟s scope-of-
work, and that projects are completed in a satisfactory and timely manner.
In contrast, the main responsibilities of contract administrators are to ensure contract compliance
with NMDOT rules and regulations, to oversee contractors‟ payments, to notify contractors and
to process amendments and extensions. Accordingly, contract administrators are expected to
assist the project manager when initiating a new contract, as well as remind the project manager
of the contract termination date in a timely manner (usually thirty days prior to the termination
date).
RULES AND ETHICAL CONCERNS
Rules and procedures employed by agencies around the world are developed to assure that:
the contracting agency‟s needs are met;
a fair cost is determined for the project;
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contracts are executed in a straightforward and successful manner;
high quality products and services are delivered;
all parties involved have their rights protected;
disputes and litigation are avoided.
In addition to following these rules and regulations, professional ethics are critical in assuring
satisfactory contract performance. Ethical concerns may arise in soliciting and evaluating
proposals, and in awarding, negotiating and monitoring contracts. Some of these concerns may
be unique to a particular NMDOT Bureau or Division, while others may be universal across the
NMDOT Agency.
Agency personnel must remain vigilant to ethical dilemmas that may arise at various stages in
managing/administrating contracts. Disregard of ethical issues can result in inefficient use of
public funds; for example, overpayment, cost overruns and schedule delays. Furthermore,
ignoring ethical concerns can result in costly litigation or violation of procurement rules and
regulations; such as, the New Mexico Administrative Code (NMAC 1.4.1), and Chapter 13,
NMSA 1978 Procurement Code. For these reasons, ethical concerns are identified and discussed
throughout the various sections of this handbook. Weblinks to specific procurement codes and
regulations are provided below. Agency personnel are urged to review these links and consult
with other staff in developing awareness of the current procurement codes and regulations.
Procurement Code Rules - 1.4.1 NMAC
(New Mexico Administrative Code)
http://www.nmcpr.state.nm.us/nmac/parts/title01/01.004.0001.htm
New Mexico Procurement Code
13-1-28 through 13-1-199 NMSA 1978
(New Mexico Statutes Annotated)
http://www.conwaygreene.com/nmsu/lpext.dll?f=templates&fn=main-h.htm&2.0
CHRONOLOGICAL LIFE OF A PROJECT
The chronological life of a project begins with the development of the scope of work. Then if
the contract is not achievable by small purchase, emergency or sole source an RFP must be
established. Accordingly, the chronological life of a project can be divided into five main
phases, namely: (1) development of the scope of work and request for proposal (RFP), (2)
proposal evaluation and selection, (3) contract negotiation, (4) monitoring the contract, and (5)
closure of the contract and final deliverables, as shown in Figure 1. Each phase is described
individually in the Handbook, including guiding principles and recommendations and a summary
of the roles of the project manager and the contract administrator. In addition, flowcharts are
provided detailing the administrative procedures at each phase, as well as documentation
requirements and regulatory and ethical considerations.
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FIGURE 1 Five Main Phases of a Project
Proposal
Evaluation and
Selection
Developing
the Scope of Work &
the RFP
Contract
Negotiation
Monitoring
the
Contract
Closure and
Final
Deliverables
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DEVELOPING THE SCOPE OF WORK AND THE RFP
Preparing a sound scope of work and RFP is not a simple task: it assumes agency personnel
understand a given problem well enough to describe it to prospective contractors, along with the
actions needed to fix it. A poor understanding of the underlying problem leads to a vague scope-
of-work statement and poorly defined deliverables, milestones and performance measures. To
avoid eventual contract failure, costly litigation or ethical concerns, the RFP should clearly
specify the underlying criteria for evaluating proposals and selecting the most qualified firm.
To help ensure a fair evaluation of proposals the RFP must define the selection criteria and
explain how they are applied in the selection process. The selection of the „most qualified‟ firm
may take into consideration a variety of evaluation criteria: contractors‟ qualifications, cost and
budgetary concerns, unique resources, and the firm‟s reputation and past experience in
completing projects with similar characteristics on time and on budget. The quality of the
proposal may also be considered: originality and feasibility of solution proposed, organization
and definition of tasks to be followed, and conformance with budget specifications. Scoring and
evaluating these criteria is a challenge in selecting among competitive sealed proposals,
involving a tradeoff analysis of strengths and weaknesses.
Finally, it is important to note that RFPs are not necessary for small purchases of $50,000 or less,
sole source procurement, or emergency procurement. Procurement rules for these alternative
contract types are covered in Sections 1.4.1.50, 1.4.1.53, and 1.4.1.58 of the New Mexico
Administrative Code (NMAC) 09-30-05, respectively.
GUIDING PRINCIPLES AND RECOMMENDATIONS
Project managers, contract administrators and technical experts should participate in writing
or reviewing the problem statement, determining the proposed actions, and drafting a
preliminary list of deliverables.
A proposed budget and a realistic timeframe should be determined and carefully considered in
the determination of the scope-of-work.
A preliminary list of deliverables should be clearly defined and approved by technical experts.
Selection criteria should be clearly defined and approved by technical experts, the project
manager and the contract administrator.
The draft of the scope-of-work should be reviewed and checked for consistent interpretations
by circulating it among agency personnel (i.e., upper management within the respective
Bureau or Division and personnel from the Procurement Services Bureau). Upon edit, the
final draft should leave no impression of vagueness.
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Agency personnel should reach a consensus that the final draft provides the foundation for
describing the scope-of-work in the RFP.
For training purposes two examples of scope-of-work are given below. Example A is considered
to be a model example, containing sufficient detail and precision to perform the underlying
project successfully and monitor the contractor and deliverables through various phases of the
project. Example B is lacking in these qualities in terms of omitting key details in outlining the
project, and providing a weak description of expected deliverables, the project timetable and
milestones.
______________________________________________________________________________
SCOPE OF WORK EXAMPLE A
1. The Contractor shall develop and produce a Construction Manual that will be used as
a parallel reference to the Department‟s current 2007 Standard Specifications for
Highway and Bridge Construction, hereinafter referred to as the Department‟s
“Standard Specifications”.
2. The Construction Manual, at a minimum, shall contain clarification to areas within
the Department‟s Standard Specifications that may appear to be ambiguous, unclear
or in a legal context that is not easily interpreted.
3. The Contractor will also be required to incorporate suggestions into the Construction
Manual for dispute resolution between the NMDOT and an awarded construction
contractor and simple trouble shooting solutions related to common problems/issues
related to road construction projects.
4. The Contractor shall meet with the Department‟s Design Team, which will be made
up of District Engineers, Construction Engineers, Project Engineers, Project
Managers and other pertinent Department staff, twice (2) a month throughout the
development of the Construction Manual for input and progress. All meetings will
take place in Santa Fe, NM.
5. As a tool for developing subject matter for the Construction Manual the Contractor
shall research information obtained by the Department from other states and any other
internal sources that may be of value for the Construction Manual.
6. The NMDOT is currently in the process of updating all Divisions to the Standard
Specifications. Once the updates have been completed (tentatively Feb/March 2012)
the Contractor shall incorporate any relevant revisions/updates into the Construction
Manual.
7. Deliverables:
a. Kick Off Meeting: Upon issuance of a fully signed contract the Contractor shall
meet with the Department‟s project manager and members of the Design Team to
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discuss the project, finalize the project schedule, which shall be incorporated by
reference into the final contract, and coordinate future meetings.
b. Preliminary Draft: At 30% completion of the Construction Manual the Contractor
shall prepare and submit to the Design Team a preliminary draft of the document
for review and approval. Review and approval will be conducted by the Design
Team within a thirty (30) day period.
c. Secondary Draft: At 60% completion of the Construction Manual the Contractor
shall prepare and submit to the Design Team a secondary draft of the document
for review and approval. Review and approval will be conducted by the Design
Team within a thirty (30) day period.
d. Tertiary Draft: At 90% completion of the Construction Manual the Contractor
shall prepare and submit to the Design Team a tertiary draft of the document for
review and approval. Review and approval will be conducted by the Design
Team within a thirty (30) day period.
e. Final Draft – at 100% completion of the Construction Manual the Contractor shall
prepare and submit to the Design Team a final draft of the document for review
and approval. Review and approval will be conducted by the Design Team within
a thirty (30) day period.
Failure by the Contractor to meet the agreed upon dates for submittal of any
subsequent drafts will result in liquidated damages in the amount of $100/day
to be paid by the Contractor to the Department for every day past the draft
submittal deadline.
8. At completion of the project the Contractor shall provide all documentation to the
Department in editable electronic format and printed bound copy.
SCOPE OF WORK EXAMPLE B
The Department intends to develop a “design team” that will consist of
professionals with extensive experienced and knowledge to aid the consultant in
the development of the Construction Manual. The consultant is to develop a
Construction Manual for side by side reference with the current 2007 Standard
Specification for Highway and Bridge Construction. The Standard Specifications
has two (2) divisions that are currently being updated (Division 100 and Division
400). The consultant will be required to accommodate the updates of these
divisions within the newly created Construction Manual document. The
consultant will provide five (5) stages for review and comment by the NMDOT as
detailed below.
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Kick Off
30% - Preliminary Draft
60% - Draft
90% - Final Draft
Submittal
The Consultant will be allowed to and is encouraged to interview District
Engineer(s), Construction Engineer(s), Project Engineer(s), Project Manager(s)
and other pertinent Department staff from any District(s) prior to preparing the
preliminary draft (30%). There will be a review / comment period of 30 days
prior to the development of any subsequent draft. Regular review and design
team meetings will part of the contract and negotiated after selection is made.
All documentation will be provided in editable electronic format and printed
bound copy.
______________________________________________________________________________
Comparing the scope-of-work examples is instructive, insofar as illustrating how peer reviews
and subsequent revision/editing improve the scope-of-work description. Example A provides a
better guide to prospective contractors on the criteria and process for selecting the preferred
proposal, and the expected project deliverables and milestones. Also Example A outlines the
process by which the Project Manager and Contract Administrator will monitor the successful
contractor through various phases of the project, in terms of the expected deliverables, the
project timetable and milestones.
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS
Role of Project Managers
The main role of the project manager during this first stage of the project is to serve as a leader
for the team responsible for defining the problem and writing the scope of work and RFP.
Responsibilities of the project manager during this phase include:
ETHICAL ISSUES
Scope-of-work should NOT favor particular contractor(s)
Scope-of-work should NOT be left vague to allow for easy changes and/or to
accommodate particular contractor(s)
Problem statement or scope-of-work should NOT be discussed with contractors
before the RFP is issued
Confidentiality of sealed proposals should be exercised and respected
Procedures set forth for sealed competitive proposals should be closely followed
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Obtainment of RFP template from the Procurement Services Bureau
Selection of a panel of technical experts to form an evaluation committee
Coordination and moderation of meetings for problem discussion and definition
Drafting scope-of-work for the RFP, carefully considering the available budget and timeframe
Determination of deliverables
Establishment of evaluation criteria
Distribution of scope-of-work draft to contract administrator and members of the evaluation
committee for review and approval
Submission of the scope-of-work draft to the Procurement Services Bureau for review,
approval and advertisement
Role of Contract Administrator
During this first stage of the project, the contract administrator‟s main role is to aid in the
development of the scope-of-work, the budget, and the list of deliverables.
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED
The Procurement Services Bureau recommends project managers to anticipate a total of three to
five months from the initiation of the RFP to the negotiation and finalization of the contract.
Two to three months would be dedicated solely to the RFP process, including the 30 to 45 days
required from date of advertisement to receipt of proposals. However, the time required for
drafting the RFP can be controlled, to some extent, by the program manager. The various steps
are described in the following flowchart (Figure 2).
RULES
Rules related to the development of RFPs for competitive sealed proposals are presented in
Section 1.4.1.31 of the New Mexico Administrative Code (NMAC) 09-30-05. In addition, rules
related to the amendments to the RFPs prior to submission of proposals are presented on Section
1.4.1.34. RFPs are not necessary for small purchases of $50,000 or less, sole source
procurement, or emergency procurement. Rules for these alternative contract types are covered
in Sections 1.4.1.50, 1.4.1.53, and 1.4.1.58 of the NMAC 09-30-05, respectively.
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FIGURE 2 Administrative Procedures and Documentation Required in the Development of
the Scope-of-Work and the RFP
Project manager obtains RFP template from
the Procurement Services Bureau
Project manager selects an evaluation committee
Project manager submits RFP draft to
the Procurement Services Bureau for review
Procurement Services Bureau:
reviews scope-of-work
drafts remaining sections of the RFP
routes documents for signatures
advertises the RFP for 30 to 45 days
Project manager, with the help of the contract administrator
and the evaluation committee:
determines a budget and a timeframe
drafts the scope-of-work of the RFP
creates a preliminary list of deliverables
establishes evaluation criteria
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PROPOSAL EVALUATION AND SELECTION
The evaluation and selection of the highest ranked proposal or most qualified firm is conducted
by an appointed Evaluation Committee. As described in the previous section, these individuals
prepare the scope of work and RFP giving them superior understanding of the professional
service needs of the agency. The criteria used in evaluating proposals must be specified in the
RFP with the intent of selecting the most qualified firm to perform the desired services.
Competitive sealed proposals are first evaluated by the appointed Evaluation Committee using
criteria and weights specified in the RFP. Proposals should be evaluated only if they are
submitted on time, are complete, and conform to the criteria stated in the RFP. Following an
initial screening, the Evaluation Committee may conduct oral presentations with finalists.
Negotiations are then undertaken with the highest ranked firm once the evaluation process is
completed. At this time the Evaluation Committee may provide further information of its needs
and clarify contractual terms; for example, the budget, the timeline and the expected
deliverables.
Sole-source professional service contracts are used if there is only one source for a particular
type of service. The evaluation/selection of sole-source contractors must be justified in
accordance with State Procurement Code requirements, and involves developing/specifying
criteria in reviewing and justifying the sole-source contractor. Small purchase professional
service contracts are used when the cost of required services is less than $50,000. The small
purchase method must also follow the State Procurement Code by soliciting quotations to
perform the required work from at least three qualified contractors. The aim is to select the most
advantageous offer.
GUIDING PRINCIPLES AND RECOMMENDATIONS
Evaluation of professional service contractors should be performed in accordance with criteria
set forth in the RFP.
A pre-proposal conference can be held prior to the submission of proposals to ensure
competing contractors have a sound understanding of key tasks and agency goals.
A competitive procurement process should be applied in order to obtain unbiased estimates of
the true costs of performing desired tasks.
All proposals for professional service contracts should be scrutinized to avoid potential
conflicts of interest.
Hasty, incomplete or biased evaluations should be avoided; any of which can result in a failed
selection process and costly litigation with non-selected offerors.
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ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS
Role of Project Managers
The main role of the project manager during this stage of the project is to assure that the
evaluation and selection processes are conducted appropriately. Responsibilities of the project
manager during this phase include:
Responding to questions prospective offerors‟ may have related to the scope of work and
RFP, which should be facilitated through the Procurement Services Bureau.
Obtainment of evaluation packets from the Procurement Services Bureau which includes
proposals, evaluation sheets and instructions.
Distribution of proposals to members of the evaluation committee for review.
Evaluation of proposals.
Recommendation of selected proposal to Bureau Chief and Procurement Services Bureau.
Scheduling and moderation of meeting(s) for selection of winning proposal.
Role of Contract Administrator
During this stage of the project, the contract administrator‟s main responsibilities are to:
Assist the project manager in responding to prospective offeror‟s questions, which should be
facilitated through the Procurement Services Bureau.
ETHICAL ISSUES
The proposal evaluation committee should maintain a public record of decisions
justifying contract awards
The proposal evaluation committee should ensure rules and regulations are
followed to promote integrity in public procurements
The proposal evaluation committee should avoid favoring particular contractor(s)
due to previous relationships and/or conflicts of interest
The proposal evaluation and selection process should result in the choice of a „most
qualified‟ contractor upon assessing the strengths and weaknesses of the proposals.
Confidentiality of sealed proposals should be respected
Procedures set forth for sealed competitive proposals should be closely followed
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Assist in organizing documentation as evaluations are completed by the Evaluation
Committee. The Contract Administrator may also participate in the evaluation and selection
of the winning proposal if he or she is assigned to the Evaluation Committee.
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED
To expedite the selection process, the Procurement Services Bureau compiles all proposals
received, reviews them for conformance to RFP requirements, and provides evaluation packets to
the project manager. Evaluation sheets provided should be returned to the Procurement Services
Bureau within 2 weeks. Figure 3 illustrates the administrative procedure to be followed.
RULES
The rules for evaluating/selecting professional service vendors aim to ensure fair evaluations and
efficient use of public funds. Corrupt and/or incompetent practices tend to result in the
misappropriation of public funds, costly litigation or even severe penalties. Procedures for
evaluating/selecting competitive sealed proposals are described in sections 1.4.1.38 and 1.4.1.43,
NMAC. Sole-source contracts also follow the NMAC rules. Furthermore, if federal-aid funds
are involved, approval must be obtained from the Federal Highway Administration (FHWA), as
described in the Federal Regulation 23 CFR 172 Appendix A. Small purchase professional
service contracts also follow the NMAC rules in choosing the “most advantageous offer” to
NMDOT. The selection of the most advantageous offer must also conform with provisions set
forth in the Governmental Conduct Act; for example, prohibitions from contracting with
lawmakers, their families and businesses.
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FIGURE 3 Administrative Procedures and Documentation Required in the Evaluation and
Selection of Winning Proposal
Project manager:
distributes proposals to appointed Evaluation Committee members
reviews and evaluates proposals
schedules meeting(s) for selection of winning proposal
Project manager receives evaluation packets containing:
an instruction set
proposals
evaluation sheets
Contract administrator:
evaluates proposals, if
appointed to Evaluation
Committee
assures that all budget items
follow regulations
Project manager recommends selected proposal to Bureau Chief
and to the Procurement Services Bureau
Project manager responds to questions prospective Offerors‟ may
have related to the scope of work and RFP, facilitated by the
Procurement Services Bureau.
facilitated through the Procurement Services Bureau. schedules and
holds informational/debriefing session(s) for interested offeror‟s
(when necessary)
Evaluation committee reviews
and evaluates proposals
Procurement Services Bureau informs proposing contractors
of committee‟s decision
Procurement Services Bureau:
receives all proposals
reviews proposals for conformance to RFP requirements
prepares evaluation packets for evaluation committee members
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CONTRACT NEGOTIATION AND PROCESSING
Negotiating and settling the terms of any contract involve a healthy amount of give-and-take, and
should lead to a well-written contract. The negotiation process begins following the selection of
the most qualified Professional Services contractor. The Department enters into negotiations
with the top-ranked contractor to establish a fair and equitable price for the services to be
provided. In preparing for negotiations the Department reviews the proposed cost estimate and
either establishes the contract if it is acceptable or enters into negotiations if the pricing or budget
is deemed unacceptable. A successful negotiation process gives the Department a better chance
of achieving an efficient use of public funds by sharing information and setting enforceable
contractual terms – that is to say, terms governing the payment of public funds and accounting
for contractor performance.
The Project Manager assumes responsibilities for the contract negotiation process. The
negotiation process gives the contract parties an opportunity to share information over the
complexity of the project, timelines, and cost estimates on a task or sub-task basis. To establish
an independent cost estimate the Project Manager is responsible for preparing an assessment of
resource requirements, with input from appropriate sections in the Department. Consequently,
the Project Manager considers various cost elements in preparing an independent cost
assessment. First, the terms governing the fee structure in fixed-price agreements are specified
on a lump-sum (preferred) or unit rate (indefinite quantity) basis, taking account of the following
cost items:
1. labor-hours by activity and labor category, as determined by negotiations,
2. other direct costs as determined by negotiation,
3. indirect costs as determined by negotiation,
4. approved overhead rate,
5. profit margin as determined by negotiation, and
6. gross receipts tax and other applicable taxes.
7. the use of incentive/disincentive clauses are project-specific and noted in the RFP.
CONTRACT PROCESSING
The contract can be processed once an agreement with the top-ranked offeror is reached. If no
agreement is reached then the Department may begin negotiations with the second-ranked
offeror, and the negotiation process continues until an agreement is reached with a qualified
offeror. If the supply of qualified offerors is exhausted then the Department consider
readvertising the RFP or performing the work in-house.
Once agreement is reached the Department‟s “Standard State Department of Transportation
Contract for Professional Services” is prepared with the “boiler plate” and scope of work,
schedule and fee included. The Contract Administrator is responsible for processing the contract
according to several major steps:
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A. Assembly – The contract will include the fixed-price agreement along with a description of
services or information to be provided by the Department, and a description of the work to be
performed by the contractor.
B. Execution – Several reviews and approvals are required to execute the contract.
The contract is sent to the Office of the General Counsel for review and approval of form
and legality.
Upon internal approval, the contract is sent to the contractor for review and concurrence
on the fee, scope of work, and schedule.
Upon return to the Department the contract is sent to the Secretary for signature.
Once the signed copies are received from the Secretary they are sent to New Mexico
Taxation and Revenue Department for verification of the contractor‟s Tax I.D. number.
The Project Manager prepares the service contract (final fund encumbrance).
All but one of the signed copies are retained by the Department. One copy of the signed
contract will be sent to the contractor along with the Notice to Proceed.
C. Notice to Proceed – Prior to issuing a notice to proceed, the contractor will be contacted to
determine a mutually agreeable starting date. Then, an official notice to proceed is prepared and
mailed to the contractor, with a copy of the executed contract attached.
GUIDING PRINCIPLES AND RECOMMENDATIONS
Applying the contract negotiation process and administrative procedures described above is
essential in managing a successful contract between the parties and an efficient use of public
funds. Several principles and recommendations may be followed to help ensure the negotiation
process and procedures are followed.
The Project Manager, Contract Administrator and members of the Evaluation Committee
should verify the consistency between the scope-of-work in the RFP and the contract
language outlining the descriptions of the project and work being performed by the contractor.
The negotiation process should be conducted with the aim of sharing any information which
could impact the work being performed, milestones, deliverables and due dates.
The fees and schedule of deliverables should be documented on a task-by-task basis and
examined by the contract parties for mutual agreement.
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The contract should describe how invoices are to be submitted, how they match with
deliverables, and how the Department will use this information to measure progress
throughout the project lifetime.
To avoid costly amendments to the contract the various parties should carefully review the
contract to ensure all of the negotiated settlements concerning fees, scheduling and invoicing
are correctly specified and conform with State/Federal procedures.
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS
Role of Project Managers
The main role of the project manager during the contract negotiation/processing stage of the
project is to develop an independent cost estimate of the work being performed by the top-ranked
contractor and work with the Procurement Services Bureau in drafting and processing the
contract. Accordingly, the responsibilities of the project manager during this phase include:
Preparing an independent cost estimate based on a consideration of a variety of cost elements
described above.
Scheduling and moderating contract negotiation meeting(s) between the top-ranked offeror
and NMDOT personnel, including contract administrator and Procurement Services Bureau
staff.
Assisting Procurement Services Bureau personnel in the drafting of the contract.
Distributing draft of contract to contract administrator and selected contractor for review.
Submitting final draft of the contract to Bureau Chief for approval.
Submitting approved contract to the Procurement Services Bureau for signatures.
Role of Contract Administrator
During this stage of the project, the contract administrator‟s main role is to work with the
Procurement Services Bureau in assuring that the contract is drafted according to all applicable
rules and regulations. Responsibilities of the contract administrator during this phase include:
Reviewing draft of the contract.
Reviewing budget items for compliance with rules and regulations.
Reviewing invoicing and payment schedules for compliance with rules and regulations.
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ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED
The Procurement Services Bureau recommends project managers to anticipate a total of at least 3
to 6 weeks for the negotiation and finalization of the contracting process. However, the time
required for obtaining contractor‟s signatures may vary extensively.
FIGURE 4 Administrative Procedures and Documentation Required in the Negotiation
Phase of the Contracting Process
Project manager:
assists Procurement Services Bureau in drafting contract
distributes draft of contract to contract administrator and
contractor for review
Contract administrator:
reviews draft of contract
assures that all budget
items follow regulations
assures invoicing and
payment schedules comply
with regulations
Procurement Services Bureau produces a draft of the contract based
on the RPF and the winning proposal
Project manager:
schedules and moderates contract negotiation meeting between
contractor, contract administrator and Procurement Services
Bureau staff
submits final draft of the contract to Bureau Chief for approval
submits approved contract to the Procurement Services Bureau
for signatures
Contractor reviews
draft of contract
Procurement Services Bureau finalizes contract
by obtaining signatures from:
General Counsel
Contractor
Cabinet Secretary
Taxation and Revenue
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MONITORING THE CONTRACT
This chapter of the Handbook discusses monitoring activities in managing professional services
contracts. Effective monitoring rests on a mutual understanding of the detailed work plan and
scheduling as specified in the contract negotiations between the Department and the contractor.
Subsequent monitoring actions cover various technical and administrative issues including,
reviewing the progress of the technical work and accounting for the contractor‟s budget
invoicing and timeline commitments. The Department follows the NMSA and Procurement
Code Rules in performing its monitoring activities.
GUIDING PRINCIPLES AND RECOMMENDATIONS
The Department monitors Professional Services contracts through technical reviews, progress
reporting and invoice accounting. These monitoring activities should ensure projects are
completed on time and within budget by controlling for scope-creep, schedule slippage and
cost overruns.
Documenting receipt and acceptance or rejection of all deliverables is essential. Not only will
it assist project managers in future projects, but it will also be essential in the case of audits or
future litigation.
Documenting actions taken in the case of rejected deliverables is also critical.
Projects vary in terms of complexity, duration and funding commitments. Consequently some
projects should be monitored more frequently than others.
Contract invoicing/payments should be checked for consistency with the work being
performed. It should also be verified that the budget items comply with NMSA and
Procurement Code Rules and that all necessary receipts are provided.
The Department prefers to resolve disputes at the lowest possible level and bring unresolved
disputes to the attention of successively higher levels of authority until a settlement is
reached.
ETHICAL ISSUES
Requests for changes in the scope of work, timeline extensions, or fee amendments
should be carefully scrutinized to avoid opportunistic behavior by contractors.
Negotiating monetary rewards or penalties can help ensure that contracts are
completed on time and within budget.
Poor monitoring can lead to unsatisfactory work performance and poor use of
public funds.
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ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS
Role of Project Managers
During the life of the contract, the main role of the project manager is to assure that the project is
progressing according to schedule and budget. Responsibilities of the project manager during
this phase include:
Maintaining communication with contractor throughout the project.
Assuring that deliverables are received on time and that milestones are met on schedule.
Assuring that deliverables submitted closely follow contract specifications.
Assuring that items included in the invoices match the progress achieved.
Documenting receipt of acceptable deliverables and/or completion of milestones.
If deliverables submitted do not meet the agency‟s standards and/or if milestones are not
completely in a satisfactory manner:
o Discussing with contract administrator partial payment or non-payment of invoice until
progress is achieved and/or requirements are met.
o Formally informing contractor that progress is not satisfactory and/or that deliverables do
not meet contract requirements.
o Documenting the events, the conversations, and the measures taken.
o Terminating contract if continuous lack of performance is observed.
When necessary, drafting requests for amendments to the contract.
Role of Contract Administrator
The contract administrator‟s main role during this stage of the contract is to assure that invoices
received are in accordance with NMSA and Procurement Code Rules, and that the contractor is
paid on time. Responsibilities of the contract administrator during this project stage include:
Checking whether items included in the invoices follow the budget in the contract.
Confirming that all items in the invoices can be covered according to rules and regulations.
Confirming with project manager that all deliverables were received, all milestones were met,
and that performance was satisfactory before authorizing payment of the invoice.
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Assuring that all required receipts have been received.
Checking invoice for mathematical errors.
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED
Figure 5 describes the recommended procedure to be followed in the monitoring of contracts.
Although the responsibilities of the project manager and the contract administrator do not
change, the order in which the invoices are reviewed can vary from Bureau to Bureau, according
to personal preference; that is, the contract administrator may prefer to review the invoice for
mathematical errors and conformance to rules and regulations before or after the project manager
ensures that milestones have been met, deliverables submitted and work performed satisfactorily.
Amendments to the contract may be necessary due to unforeseen circumstances. Amendments
may be needed to provide contractors with a time extension, a budget reallocation, a budget
increase or under very special circumstances, a change in scope-of-work.
Figure 6 describes the amendment process. It is important to note that regardless of the type of
amendment requested, full justification should be provided by the contractor and approved by the
project manager, the contract administrator, the Bureau Chief, and the Procurement Services
Bureau.
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FIGURE 5 Administrative Procedures and Documentation Required in Monitoring
Contracts
Project manager:
obtains Bureau Chief‟s approval
authorizes payment of invoice
documents acceptance of deliverables
Project manager receives invoice:
Were deliverables received?
Were milestones met?
Do the deliverables meet contract specifications?
Do the invoices match the progress achieved?
Contract administrator:
Do items in invoice follow the budget in the contract?
Are items in the invoice reimbursable according to rules and regulations?
Were all required receipts received?
Is the invoice free of mathematical errors?
Project manager:
Discusses with contract administrator the following alternatives:
o partial payment of invoice until satisfactory progress is achieved
and/or requirements are met
o non-payment of invoice until satisfactory progress is achieved and/or
requirements are met
o termination of contract for lack of performance
Formally informs contractor that progress is not satisfactory and/or that
deliverables do not meet contract requirements
Documents the events, the conversations, and the measures taken
YES
NO
NO
YES
After notification, did the contractor perform the work specified on the
contract and/or re-submit missing or unsatisfactory deliverable?
YES
NO
Project manager terminates contract for
lack of performance
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FIGURE 6 Administrative Procedures and Documentation Required in the Amendment
Process
RULES
Project documentation
Formal procedures are followed in maintaining Professional Services Contract records and
progress reports. Project files are kept at the End User/Program office. At a minimum, the
project file should contain the following items:
copy of the contract and all corresponding amendments (originals maintained by the Project
Manager);
documentation of the negotiation history;
copies of progress reports and schedule updates;
copies of all meeting minutes;
copies of all correspondence generated by the project;
Project manager reviews amendment request and justification provided
Contract administrator:
reviews amendment request
assures that all changes in the budget follow regulations
submits amendment to Bureau Chief for approval
Contractor submits a formal request for amendment
Procurement Services Bureau reviews amendment and finalizes the
process by obtaining signatures from:
General Counsel
Cabinet Secretary
Taxation and Revenue
Contractor
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copies of all submittals;
copies of all review comments and their resolution; and
any other pertinent documents or items.
Progress Reports
Progress reports of the contractor‟s work should contain the following information:
Project Identification – Include Project Name, Project Number, Project Control Number,
Contract Number, Vendor Number, Contractor Name, Contractor Project Manager, and
NMDOT Project Manager.
Reporting Period – The month or period covered by the report.
Narrative Discussion of Project Status – Include the following: (1) discussion of work
accomplished since the last progress report, (2) discussion of work planned to be
accomplished before the next progress report, (3) description of any outstanding issues or
concerns, and (4) statement of overall percentage of project completion;
Activity Progress Spreadsheet – Shows percent complete by activity, in terms of labor
expended and/or dollar value earned by activity. If a resource loaded schedule is being used,
resource reports from the scheduling system may be used to meet this requirement.
Gantt Chart or Other Approved Schedule Chart – A graphic portrayal of the current schedule
in comparison with the approved baseline schedule. Schedule updates shall show at a
minimum the target and actual/projected start and finish dates, and a percentage complete to
date.
Request for Time Extensions
Justifications for time extensions should specify the additional work being performed by the
contractor, or the changed conditions affecting the time needed to complete the contract. Time
extensions may be requested by either the Project Manager or the contractor. If the completion
date is delayed into a new quarter or fiscal year the Project Manager should notify the Regional
Design Manager and other Department units concerned with fund management.
Invoicing and Payments
The Department accepts monthly invoices for work performed under contract and should verify
the invoices are consistent with activities described in the monthly progress report. If the invoice
is consistent with progress, then the invoice is approved for payment. If the contractor submits
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invoices believed to be inaccurate or inappropriate they must be corrected and re-submitted, with
a cover letter explaining the problem. The Department is not responsible for any additional work
performed by the contractor prior to receipt of a duly executed agreement and notice to proceed.
Any extra work performed by the contractor without a written agreement is done at the
contractor‟s risk.
Changes in Personnel
Any changes to the key personnel identified in the contractor‟s proposal must be approved by the
Department prior to the change being implemented by the contractor.
Amended Agreements/Invoices
When a contract is amended for a fee amount and associated work, then the contractor will
submit amended invoices which reflect the amended fees and associated work. The amended
portion of the payment should not be added or rolled-up into the existing invoice format.
Monetary incentives
The Department may impose a pre-set monetary penalty for failure to meet key milestone dates
or the completion date (liquidated damages). Or the Department may offer a pre-set monetary
reward for early completion of the project or meeting key milestone dates (incentive fees).
Liquidated damages or incentive fees are negotiated and described in the contract.
Monitoring Caveats
The contractor is responsible for correctness/completeness of project documents submitted to the
Department, and remains responsible for any damages or delays resulting from the errors and
omissions. The Department will not provide an extensive check of any plans submitted by the
contractor. Materials are only reviewed for conformity with NMDOT procedures and terms of
the contract. Acceptance of contract deliverables does not mean that the Professional Services
Contractor is relieved of responsibility for errors and omissions. Any errors or omissions remain
the full responsibility of the contractor. Corrections will be made by the contractor at no
additional cost to the Department.
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CLOSURE OF CONTRACT AND FINAL DELIVERABLES
In the last phase of the contracting process, verification is made that all the work specified in the
contract has been satisfactorily completed and all deliverables have been received and formally
accepted by the NMDOT. Also in this phase, final payments are made to the contractor,
including retainage where applicable. Assuming the contract has been carefully drafted and
monitored; this last phase is straightforward, simply consisting in an extension of the monitoring
principles described previously. As with all phases of the contract, thorough documentation of
all aspects of the project is essential. Filing of these documents in a clear and organized manner
assures that they will be available as references for future projects and should litigation be
necessary, that they will assist NMDOT lawyers get a full understanding of the contract, the
issues that developed and how they were addressed.
GUIDING PRINCIPLES AND RECOMMENDATIONS
As the end of the contract approaches, it is useful for the project manager to revisit the contract
terms. Particular attention should be paid to the description of all deliverables and their due
dates. At this time, the project manager should also ensure that every aspect of the project has
been carefully documented and that these documents have been properly filed in a separate,
organized, and clearly labeled folder. A typical contract folder should include at least the
following:
a copy of the contract including all amendments made;
a copy of all amendments made to the contract;
a copy of all reports received along with records of the date and time they were submitted;
records of receipt and acceptance of reports and deliverables;
a copy of all invoices submitted by the contractor;
financial records including records of all payments made to the contractor;
records of all communication between the contractor and NMDOT personnel, especially the
project manager and the contract administrator (including emails and notes recording relevant
phone conversations);
records of any problem encountered throughout the contract and actions taken to resolve them
(including late submission of deliverables or deliverables that did not meet the expectations of
NMDOT personnel).
Careful documentation and filing of these documents will not only assist project managers in
future projects, but it will also be particularly useful in the case of audits or any future litigation.
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Since personnel involved in a particular project may retire, leave the agency, or simply forget
details of the project after some time has elapsed, it is essential that these contract folders be
complete and well organized so that individuals that were not involved in the project can clearly
understand what occurred and how successful (or unsuccessful) each contract was.
Before finalizing the contract, it is beneficial for the project manager, the contract administrator
and other NMDOT personnel involved in the contract to hold a closure meeting. During said
meeting the project manager should revisit the goals of the contract, discuss how successful the
contractor was in achieving these goals, the quality and timeliness of the deliverables received,
and the final steps or measures needed to conclude the project. Since contractors are usually
expected to submit final deliverables 30 days before contract termination, the closure meeting
should be held after the project manager and the contract administrator have received and
reviewed the final deliverables, but before final payment is made to the contractor and the
contract is officially terminated. Other items on the agenda could be: (1) strengths and
weaknesses of the project; (2) possible causes for the problems encountered and what could be
done to avoid them in the future; and (3) lessons-learned. Finally, the project manager collects
all project files as well as all documents related to the project including emails and other records
of communication between NMDOT personnel and the contractor.
ROLES OF PROJECT MANAGERS AND CONTRACT ADMINISTRATORS
Role of Project Managers
The role of the project manager during the last stage of the project is to ensure that the contract
has been completed in a satisfactory manner; that all deliverables have been received and that the
needs of the NMDOT have been met. Responsibilities of the project manager during this phase
include:
Assuring that all deliverables have been received.
Assuring that all deliverables closely follow contract specifications and meet the needs of the
NMDOT.
Documenting receipt and acceptance of deliverables.
If deliverables submitted do not meet the agency‟s standards:
o Discussing with contract administrator partial payment or non-payment of invoice until all
requirements are met.
o Formally informing contractor that deliverables do not meet contract requirements.
o Documenting the events, the conversations, and the measures taken.
Filing in a clear and organized manner all documents related to the contract.
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Role of Contract Administrator
During the closure phase of the contract, the contract administrator‟s main role is to assure that
the final invoices received are in accordance with the appropriate rules and regulations, that the
contractor is paid on time, and if retainage was used, that it is included in the final payment.
Responsibilities of the contract administrator during this project stage include:
Checking whether items included in the final invoice follow the budget in the contract.
Confirming that all items in the final invoice can be reimbursed according to rules and
regulations.
Confirming with project manager that all deliverables were received and that performance
was satisfactory before authorizing payment of the final invoice.
Assuring that all required receipts have been received.
Checking final invoice for mathematical errors.
ADMINISTRATIVE PROCEDURES AND DOCUMENTATION REQUIRED
The recommended procedure to be followed in closing a contract is very similar to that of
monitoring a contract, as shown in Figure 7. Here again, the order in which the invoices are
reviewed can vary from Bureau to Bureau, according to personal preference.
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FIGURE 7 Administrative Procedures and Documentation Required in Closure of
Contracts
Project manager:
obtains Bureau Chief‟s approval
authorizes payment of final invoice
documents acceptance of deliverables
closes project and files all documents
Project manager receives final invoice:
Were all deliverables received?
Do the deliverables meet contract specifications?
Does the final invoice match the work completed?
Contract administrator:
Do items in invoice follow the budget in the contract?
Are items in the invoice reimbursable according to rules and regulations?
Were all required receipts received?
Is the invoice free of mathematical errors?
Project manager:
Discusses with contract administrator the following alternatives:
o partial payment of invoice until requirements are met
o non-payment of invoice until requirements are met
o termination of contract for lack of performance
Formally informs contractor that deliverables do not meet contract terms
Documents the events, the conversations, and the measures taken
YES
NO
NO
YES
After notification, did the contractor perform the work specified on the
contract and/or re-submit missing or unsatisfactory deliverable?
YES
NO
Project manager terminates contract for
lack of performance
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New Mexico Department of Transportation
RESEARCH BUREAU
7500B Pan American Freeway NE
PO Box 94690
Albuquerque, NM 87199-4690
Tel: (505) 841-9145